# NEAR EARTH, LLC X-17A-5 (2020-02-28) — Broker-dealer annual report - Company: NEAR EARTH, LLC - Form: X-17A-5 - Filed: 2020-02-28 - Period: 2019-12-31 - Accession: 0001222417-20-000001 - CIK: 1222417 - File #: 8-65846 - Material weakness: No - Auditor: Lerner & Sipkin CPA's, LLP - Auditor location: New York, NY - Contact: Hoyt Davidson - Phone: 203-972-9062 - Signed by: Hoyt Davidson (Managing Member) Original filing: https://www.sec.gov/Archives/edgar/data/1222417/000122241720000001/ne19s2.pdf --- {0}------------------------------------------------ **UNITED STATES SECURITLES AND EXCHANGE COMMISSION** Washington, D.C. 205-49 | | 0MB APPROVAL | | |-------------|--------------------------|---------------------------| | 0MB Number: | | 3235-0123 | | | Expires: August 31, 2020 | | | | Estimated average burden | | | | | hours per response 12.00 | | | | SEC FILE NUMBER | | | 8 · | 65846 | # **ANNUAL AUDITED REPORT FORM X-17A-5 PART** Ill # **FACING PAGE** Information Required of Brokers and Dealers Pursuant to Section 17 of the **Securities Exchange Act of 1934 and Rule 17a-5 Thereunder** | REPORT FOR THE PERIOD BEGINNI G | 1/1/2019 | AND ENDING | 12/31/201 9 | | | |------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------|------------|-------------|--|--| | | MMIDD/YY | | ~fMIDD'YY | | | | | A. REGISTRANT IDENTrFICA TION | | | | | | AME OF BROKER-DEALER: | | | | | | | Near Earth LLC | OFFICIAL USE ONLY | | | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box o.) | FIRM ID. NO. | | | | | | | 945 West Road | | | | | | | (No and Sucet) | | | | | | New Canaan | Connecticut | | 06840 | | | | (City) | (State) | | (Zip Code) | | | | INDEPENDE T PUBLIC ACCOUNTANT whose opinion is contained in this Report• | B. ACCOUNTANT IDENTIFICATION | | | | | | | Lerner & Sipkin, CPAs, LLP | | | | | | | (N~mc -- 1f111dmd11a/, slate las,. fim, 1111ddle name) | | | | | | 132 Nassau Street, Suite 1023 | New York | NY | 10038 | | | | (Address) | (Cil)) | (Stale) | (Zip Code) | | | | CHECK ONE:
5} Certified Public Accountant
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Public Accountant
0 Accountant not resident in United States or any of its possessions | | | | | | | | FOR OFFICIAL USE ONLY | | | | | | | | | | | | *\*Claims for exemplio11fro1111he requiremenl lhal !he a111111al report be covered by the opinion of an independenl public accountanl 11111st be supported by a stalement of facls and circumstances relied 011 as the basis for !he exemplion. See section 2./0. I 7a-5(e}(2).* SEC 1410 (06-02) *Potential persons who are to respond to the collection of informatio11 contained in this form are not required to respond unless the form displays a curre11tly l'Glid* 0MB *co11trol number.* {1}------------------------------------------------ ### **AFFIRM A Tl ON** I. Hoyt Davidson, affirm that, to the best of my knowledge and belief. the accompanying financial statements and supplemental schedules pertaining to Near Eanh , LLC for year ended December 31, 2019, are true and correct. I further affirm that neither the Company nor any officer or director has any proprietary interest in any account classified solely as that of a customer. Title ![](_page_1_Picture_4.jpeg) {2}------------------------------------------------ # **This report** \*\* **contains (check all applicable boxes):** - [x] Report of Independent Registered Public Accounting Firm. - [x] Facing Page. - [x] Statement of Financial Condition. - [ ] Statement of Operations. - [ ] Statement of Changes in Members' Equity. - [ ] Statement of Cash Flows. - [ ] Statement of Changes in Liabilities Subordinated to Claims of General Creditors (not applicable). - [ ] Computation of Net Capital for Brokers and Dealers Pursuant to Rule l 5c3-l - under the Securities Exchange Act of 1934. - [ ] Computation for Determination of Reserve Requirements for Brokers and Dealers Pursuant to Rule I Sc3-3 under the Securities Exchange Act of 1934. - [ ] Information Relating to the Possession or Control Requirements for Brokers and Dealers Pursuant to Rule I 5c3-3 under the Securities Exchange Act of 1934 (not applicable). - [ ] A Reconciliation, including appropriate explanations, of the Computation of Net Capital Pursuant to Rule I Sc3- l and the Computation for Determination of Reserve Requirements Under Rule I Sc3-3. - [ ] A Reconciliation Between the Audited and Unaudited Statements of Financial Condition With Respect to Methods of Consolidation (not applicable). - [x) An Oath or Affirmation. - [ ] A copy of the SIPC Supplemental Report. - [ ] A report describing any material inadequacies found to exist or found to have existed since the date of the previous audit (Supplemental Report on Internal Control). - [ ] Independent Auditors· Report on Internal Control Required by SEC Rule I 7a-S(g)( I). - [ ] Independent Auditors' Report Regarding Rule I 5c3-3 Exemption. - [ ] Rule I Sc3-3 Exemption Report {3}------------------------------------------------ ![](_page_3_Picture_0.jpeg) 13:.! i'iassau Slrccl. .'..cw York. XY I 00311 Tt:I :.! I :.!.571.0UlH / fax :.! I :t.57 1.0UH Jay Lerner. C.P.A. jkrncr@lcrncr\$ipkln.com .Joseph G. Sipkin. C.P.:\. j~ipkln@lcrncrslpkln.1·0111 #### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTrNG FIRM To the Members of Near Earth LLC 945 West Road New Canaan, CT 06840 ### **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of Near Earth LLC as of December 31, 2019, and the related notes (collectively referred to as the financial statement). In our opinion, the statement of financial condition presents fairly, in all material respects, the financial position of Near Earth LLC as of December 31. 2019 in confom1 ity with accounting principles generally accepted in the United States of America. #### **Basis for Opinion** The financial statement ls the responsibility of Near Earth LLC's management. Our responsibility is to express an opinion on Near Earth LLC's financial statement based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to Near Earth LLC in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. )J.et(hl/L: *)~,:: {.;/'/I<* llf Lerner & Sipkin CPAs, LLP Certified Public Accountants (NY) We have served as Near Earth LLC's auditor since 2006. New York, NY February *5,* 2020 {4}------------------------------------------------ # **NEAR EARTH, LLC** STATEMENT OF FrNANCIAL CONDITION DECEMBER 31. 2019 #### **ASSETS** | Cash and cash equivalents | 14,81
5
\$ | |---------------------------------------|------------------| | Investments (Note l) | 16,156 | | Other assets | 2,022 | | Total assets | \$
32,993 | | LIABILITIES AND MEMBRRS' F.QUITY | | | Liabilities: | | | Accounts payable and accrued expenses | \$
2,097 | | Members' equity | 30,896 | | Total liabilities and members' equity | 32,993
\$ | The accompanying notes are an integral part of this statement {5}------------------------------------------------ ## **NEAR EARTH, LLC** NOTES TO FINANCIAL STATEMENT DECEMBER 31, 2019 # **1. Nature of business and summary of significant accounting policies** *Nature of Opera/ions* Near Earth, LLC (the "Company"), a Limited Liability Company. is a broker-dealer registered with the Securities and Exchange Commission ("SEC") pursuant to section l 5(b) of the Securities Exchange Act of 1934. The Company is also a member of the Financial Industry Regulatory Authority (''FINRA'"). The Company earns consulting and advisory fees, including compensation in the form of stock or stock options, from providing investment banking services through its participation in private placement offerings and providing merger and acquisition, financial advisory and general corporate consulting services to companies. # *Basis of Presenlalion* The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. ## *Cash Equivalenls* The Company considers money market mutual funds and other highly-liquid investments with original maturities of three months or less to be cash equivalents. ## *Income Taxes* The Company is a limited liability company for federal and state income tax purposes. As such, it does not pay any taxes. The Company's income or loss is taken into consideration in the tax returns of its members for federal and state income tax purposes. {6}------------------------------------------------ ## **NEAR EARTH, LLC** NOTES TO FINANCIAL STATEMENT (CONTINUED) DECEMBER 3I,2019 #### *Fair Value Jvfeasuremenls* The Company follows Financial Accounting Standard Board (F ASB) guidance on Fair Value Measurements which defines fair value and establishes fair value hierarchy organized into three levels based upon the input assumptions used in pricing assets. Level I inputs have the highest reliability and are related to assets with unadjusted quoted prices in active markets. Level 2 inputs relate to assets with other than quoted prices in active markets which may include quoted prices for similar assets or liabilities or other inputs which can be corroborated by observable market data. Level 3 inputs are unobservable inputs and are used to the extent that observable inputs do not exist. As of and for the year ended December 31. 2019 all of the Company's investments held and income on principal transactions were valued using Level 3 inputs. The Company"s investments include an equity interest in a private portfolio company (the " Portfolio Company"') that is carried at fair value as determined by Management. Management utilizes the Company's pro-rata inte1·est in the net assets of the Portfolio Company as reported by the Portfolio Company's management. Management considers all relevant information available at the time the Portfolio Company values its investments. Management has assessed factors including. but not limited to, the Portfolio Company·s price transparency and valuation procedures in place, capital subscription and redemption activity, and existence of certain redemption restrictions. The Po11folio Company generally records its investments at fair value in accordance with U.S. GAAP. The fair value at wh ich the Portfolio Company is presented in the statement of financial condition may be different from the amount the Company would receive in a sale or liquidation of its investment and the differences may be material. | | Level I | Level2 | Level) | Total | |------------------------------|---------|--------|---------------|--------------| | Assets | | | | | | Equity Securities: | | | | | | Investments | | | | | | Deep Space Industries | \$ | \$ | \$
94 | \$
94 | | Kacific | | | 10,000 | 10,000 | | Space Services Holdings Inc. | | | 6.062 | 6.062 | | Total assets | \$ | \$ | \$
16, 156 | \$
16.156 | The following table summarizes the valuation of the Company·s investments by the above fair value hierarchy levels at December 31 , 2019: {7}------------------------------------------------ # **NEAR EARTH, LLC** NOTES TO FINANCIAL STATEMENT (CONTINUED) DECEMBER 31, 2019 | | Balance
December 3 I,
2018 | | Net
additions/
(sale) | | Net change
in unrealized
appreciation/
(depreciation) | | Balance
December 3 I,
2019 | | |------------------------------|----------------------------------|--------|-----------------------------|--|----------------------------------------------------------------|----------|----------------------------------|--------| | Assets | | | | | | | | | | Equity Securities: | | | | | | | | | | Investments | | | | | | | | | | Deep Space Industries | \$ | 1,653 | | | \$ | (1,559) | \$ | 94 | | Kaci fie | | 10,000 | | | | | | 10,000 | | Space Services Holdings Inc. | | 6,062 | | | | | | 6.062 | | Total assets | \$ | 17,715 | \$ | | \$ | ( 1,559) | \$ | 16,156 | The following is a reconciliation of Level 3 investments for the year ended December 31.2019: The following table provides information on the valuation techniques and nature of significant unobservable inputs used to determine the value of level three assets: | Asset | Fair Value
December 31, 2019 | Valuation
Techniques | Unobservable
Inputs | Range of Inputs
(Weighted
Average) | | | |----------|---------------------------------|-------------------------|-----------------------------------------------------------------------|------------------------------------------|--|--| | Equities | \$
16,156 | Derived price | Value of underlying assets
discounted for lack of
marketability | 25%-35% (30%) | | | ## **2. Commitments and Contingencies** ## *Office Lease* The lease automatically renews month to month unless and until either party notifies the other party of its intention to terminate the agreement. ## **3. Regulatory Requirements** The Company is subject to the Securities and Exchange Commission's Uniform Net Capital Rule (Rule 15c3- I) which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital both as defined shall not exceed 1500%. At December 31, 2019, the Company·s net capital of \$12,718 was \$7,718 in excess of its required net capital of \$5,000. ## **4. Compliance with Rule 15c3-3** The Company does not hold customers· cash or securities on behalf of customers and accordingly has no obligation under SEC Rule l 5c3-3-3. ## 5. **Concentrations** Approximately 82% of the Company's revenues are from two clients. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.